How do I save for retirement?  It’s a question every self-employed person out there should  be considering.

Any self-employed person can invest money into pensions, typically through a personal pension with a life insurance company or a Self Invested Personal Pension (SIPP).  Subject to some fairly generous limits, contributions to pensions will benefit from at least 20% tax relief from HMRC, so for every £800 you pay in, they will add £200 to your fund.

If you don’t wish to use the services of a financial adviser, many providers give you an opportunity to apply online for a pension and this may well be a decent place to start.  The general pension market place is very competitive and plans can often give you access to professional investment managers who invest your money in a range of assets at low cost.

Among key things to consider are the amount you wish to contribute, typically this is a regular monthly amount, which, if you’ve had a good year, you might like to top up at the end of your trading year with a one off lump sum.  The amount should be affordable, but also meaningful, if you want a decent income in retirement you’ll need to contribute a decent amount, so an indicative amount of around 15% of salary would be pretty healthy.

It’s important though to get things underway, even with a nominal initial contribution.  As they say, something is better than nothing.  Another thing to consider is how much risk you’d like to take with your investment.  Generally it will make sense to have some risk, particularly over a long period. Many websites will include risk questionnaires that, once completed, enable the provider to suggest fund selections for you.

If you have old pension pots from previous employment it’s probably worth reviewing these to see if the terms can be improved and that they are still appropriate. Many plans from the 80’s, 90’s and noughties may no longer give as good value as current products. Be wary here though, some older plans might have had guarantees or special terms that are worth holding on to. For this process then, most people would generally be best to pay and seek advice from an independent financial adviser.

New pension freedom rules mean that you have a lot more choice over what you do with your pension pot when you reach retirement, anytime from age 55 onwards, including taking up to 25% as a lump sum without paying tax. In the past the main option was to take the tax free cash and then buy an income (via an annuity) with the rest of the pot. Nowadays there are many more flexible options, which seem fairer to us whilst we are alive and to our beneficiaries when we die.

Remember, many financial advisers will be happy to have an initial meeting with you, at no cost, to discuss your objectives and look at some options for you. I’d suggest that you take them up on this valuable option.